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Electrolux Q3 Profits Fall 40% In Third Quarter


Weaker demand,
lower prices and higher raw materials
costs led to a 40.2 percent decline in Electrolux’s
third-quarter profits, to $128 million.

Net sales slipped 2.6 percent to $4 billion
for the three months, ended Sept. 30,
due in part to unfavorable exchange rates.
In comparable currencies net sales rose 1.5
percent for the period.

In North America net sales fell 6.1 percent
to $1.1 billion but rose 2.1 percent in comparable
currencies thanks to increased AC
equipment sales. Majap pricing was higher
quarter over quarter but lower than in the
year-ago period.

Operating income fell 74 percent to $16.7
million due to a greater mix of AC and lowpriced
products and higher costs for raw
materials, transportation and extensive promotions,
the company said.

In a statement, president/CEO Keith
McLoughlin noted that Electrolux, like many
businesses, “has been tangibly affected
by the decline in consumer confidence in
the mature markets of North America and
Western Europe.” He said the company will
continue its efforts to increase efficiency,
improve productivity, reduce costs and generate
strong cash flow, and that these initiatives
“will start generating a positive impact
[at] an escalating pace.”

During the quarter Electrolux elected
to discontinue one production line at the
manufacturer’s Kinston, N.C., dishwasher
factory, which had supplied the European
market. The plant will continue to produce
dishwashers for North American, and the
line’s production will be transferred to a facility
in Europe.

Looking ahead, Electrolux is projecting
a 4 percent to 5 percent decline in North
American market demand for full-year 2001,
down from a previously forecast increase of
3 percent. A total of approximately 35 million
appliances are expected to be sold in
North America in 2011, which is on a par
with 1998 volumes and down by 25 percent
from the peak year of 2005, the company